SB1221 - 562R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 45, chapter 2, Arizona Revised Statutes, is amended by adding article 3.1, to read:

ARTICLE 3.1. BASIN MANAGEMENT AREAS

START_STATUTE45-445. Basin management area; initiation procedures; petition; definition

A. The designation of a basin management area may be initiated in the Gila bend, Hualapai Valley or Willcox groundwater basin by either of the following:

1. the DESIGNATION of the director and the director's finding of any of the following:

(a) Land SUBSIDENCE WITHIN the GROUNDWATER basin due to GROUNDWATER WITHDRAWAL is endangering PROPERTY or potential STORAGE capacity.

(b) There has been ACCELERATED decline in groundwater levels within the GROUNDWATER basin over the preceding five years as measured by AT LEAST ten index wells across the basin.

(c) The groundwater basin was previously DESIGNATED as a subsequent irrigation non-expansion area that is located outside of a basin or subbasin from which groundwater may be TRANSPORTED to an active MANAGEMENT area PURSUANT to article 8.1 of this chapter.

(d) The DEPARTMENT has reported OBSERVED mean declines in GROUNDWATER levels in the basin greater than fifty feet during the period from 2000 THROUGH 2020.

2. A petition to the director signed by at least ten percent of the registered voters who reside within the boundaries of the groundwater basin specified in the petition as of the most recent report compiled by the county recorder in compliance with section 16-168, subsection H.

B. If a groundwater basin is located in two or more counties, the number of registered voters required to sign the petition prescribed by subsection A, paragraph 2 of this section shall be at least ten percent of the registered voters who reside within the boundaries of the groundwater basin, as of the most recent report compiled by the county recorder in compliance with section 16-168, subsection H.

C. The form of the petition prescribed by subsection A, paragraph 2 of this section shall be substantially similar to an initiative petition, and the applicant for the petition shall comply with section 19-111, subsections A, B and E, except that the duties required of the secretary of state shall be performed by the county recorders of the counties in which the registered voters of the groundwater basin reside. The petition must be initiated in the office of the relevant county recorder by a person who has resided in the basin for at least five years. A petition may not be accepted more than one hundred eighty days after the date of submission of the application for petition. For the purposes of this section, on request of a county recorder, the director shall transmit to the county recorder any factual data concerning the boundaries of the groundwater basin that may aid the county recorder in determining which registered voters of the county are residents and, for the purposes of this section, are eligible voters of the groundwater basin. The transmitted data shall include a map of the residences in the groundwater basin.

D. On the valid submission of the requisite signatures, the respective county board of supervisors shall cooperate to include a question on the next general election ballot for all REGISTERED voters who reside in the groundwater basin. The ballot question shall be worded, "should the (name of GROUNDWATER basin) be DESIGNATED a basin mANAGEMENT area?" followed by the words "yes" and "no".

E. WITHIN thirty days after the general election results are CERTIFIED, if a majority of ELIGIBLE voters voted in favor of the FORMATION of the basin MANAGEMENT area, the director shall do both of the following:

1. Make and file in the director’s office written findings with respect to matters considered during the public meetings. If the director decides to designate a basin management area, the director shall make and file an order designating the basin management area.

2. file a true map of the basin management area in the office of the county recorder of the county or counites in which the basin MANAGEMENT area is ESTABLISHED.

F. For the purposes of this section, "land SUBSIDENCE":

1. means the settling or lowering of the surface of land that results from the withdrawal of groundwater.

2. Does not INCLUDE the SETTLING of the alluvium of a river CHANNEL.END_STATUTE

START_STATUTE45-445.01. Meetings; boundaries; notice; establishment

A. If the director designates a basin as a basin management area independent of a general election, the director shall hold a series of public meetings as follows:

1. The director shall give reasonable notice of each meeting, including publishing the notice once each week for two consecutive weeks in a newspaper of general circulation in each county in which the proposed basin management area is located. The director and the counties in which the proposed basin management area is located shall post the notice on the department's and counties' websites. The notice shall contain the time and place of the meeting, the legal description and a map clearly identifying and describing all lands to be included in the proposed basin management area and any other information the director deems necessary.

2. The first and second meetings shall be held at a location in the county in which the major portion of the proposed basin management area is located not more than sixty days after the first publication of the notice of the meeting. At the meeting, the director shall present any data on groundwater levels for the proposed basin management area from the department and shall describe the effects of the proposed formation of the basin management area, the cost of applications that users may submit to the department and the effects of water conservation. Any person may appear at the meeting, either in person or by representative, and may submit oral or documentary information regarding the proposed action or any secondary modeling challenging the modeling completed by the department pursuant to section 45-445.

3. The director may call any other public meetings the director deems necessary.

b. WITHIN thirty days after the final public meeting as declared by the DIRECTOR, the director shall do both of the following:

1. Declare the basin MANAGEMENT area ESTABLISHED.

2. file a copy of the director's findings PURSUANT to section 45-445, subsection A and a true map of the basin management area in the office of the county recorder of the county or counties in which the basin MANAGEMENT area is ESTABLISHED.END_STATUTE

START_STATUTE45-445.02. Basin management areas; certificate of groundwater rights; groundwater users; application; annual report

A. Within fifteen months after a basin management area is established, the director shall grant to each water user who applies for a certificate of groundwater rights a certificate that entitles the user to use the annual allocated amount of water as follows:

1. For municipal or industrial users, on application the director shall grant the user a certificate of groundwater rights that is consistent with the maximum amount of groundwater withdrawn and used by the user in acre-feet in any one year in the five preceding years before the date of formation of the basin management area.

2. For irrigation users, the director shall grant the user a certificate of groundwater rights that is consistent with the average use of the irrigation groundwater user in acre-feet over the ten years preceding the date of formation of the basin management area. The director shall exclude from the calculation of the average amount of water used annually by an irrigation user in the ten years preceding designation of the basin management area any years during which the irrigation user did not use water.

B. The department shall increase the amount of water entitled to a user via a certificate of groundwater rights if the user has made substantial capital investment in the twelve months before the petition is circulated for a basin management area designation.

C. For planned RESIDENTIAL or mixed-use DEVELOPMENTS that have been approved by the applicable zoning AUTHORITY, the landowner shall be granted a CERTIFICATE of groundwater rights EQUAL to the PROJECTED water DEMAND of the DEVELOPMENT at build out.

d. Beginning after a basin management area petition is approved, new groundwater pumping may not occur in the basin management area, except that a user with a certificate of groundwater rights may retire or diminish the groundwater user's withdrawal from an existing well and withdraw an equal amount of groundwater from a replacement well or existing well for the same use consistent with the groundwater user's certificated groundwater right on the same property or may withdraw intentionally recharged water or transfer a cERTIFICATE of groundwater rights and the ASSOCIATED groundwater as prescribed by this article if there remains a net benefit of ten percent or more to the aquifer.

e. The department may not require a groundwater user to meter any wells located in a basin management area or to report the user's groundwater use beyond the requirements prescribed in subsection f of this section.

f. A groundwater user shall annually report to the department an estimate of groundwater use based on pumping capacity and the power usage of the user's groundwater pumping or other similarly reliable and accessible methods. For the purposes of this subsection:

1. A user may voluntarily acquire and report metering data.

2. the annual report a GROUNDWATER user SUBMITs to the department is a public record.

3. Reports and the CORRESPONDING data may be presented as evidence in any court in this state only if the case does not involve a general stream adjudication or a federally RESERVED water right. A groundwater user may consent to the waiver of this PRIVILEGE.

g. an application for a CERTIFICATE of GROUNDWATER rights shall include all of the following:

1. THE applicant's name and mailing ADDRESS.

2. The name of the basin MANAGEMENT AREA SUBJECT TO THE APPLICATION from which THE APPLICANT HAS WITHDRAWN GROUNDWATER.

3. a SWORN STATEMENT THAT ALL INFORMATION contained in the application is true, COMPLETE and correct ACCORDING to the best BElief and KNOWLEDGE of the applicant.

4. if the application is for municipal or industrial groundwater use:

(a) The MAXIMUM amount of groundwater the applicant withdrew and used in any one year during the five years PRECEDING the date of FORMATION of the basin MANAGEMENT area.

(b) The applicant's use or type of use of groundwater withdrawn by the applicant.

5. if the application is for AGRICULTURAL groundwater use:

(a) a legal DESCRIPTION and a map of all land owned by the APPLICANT for WHICH the applicant claims the right to withdraw and use groundwater.

(b) The amount of water the applicant has used for AGRICULTURAL PURPOSES on the land each year during the ten years PRECEDING the date of FORMATION of the basin MANAGEMENT area.

h. For irrigation users, substantial capital investment includes the improvement of land, infrastructure or on-site irrigation distribution facilities, including the drilling of wells.

I. For NON-IRRIGATION use, substantial capital investment INCLUDES costs related to any of the following:

1. Acquisition of permits and approvals, including legal, technical and environmental services that are necessary for the authorization to proceed with the project.

2. the acquisition or lease of land for purposes of rights-of-way, easement or other state or federal land use authorization.

3. improvement of land for the intended non-irrigation use.

4. construction of groundwater-related infrastructure or improvements, including water distribution facilities, storage facilities, recharge facilities, the drilling or equipping of wells, groundwater treatment facilities water and power transmission and other project-associated facilities.

5. construction and maintenance of ancillary structures that are critical to a non-irrigation project.

j. If an applicant demonstrates a substantial capital investment in the facilities associated with a non-irrigation use, the Director shall issue a groundwater permit for the identified use. if the applicant puts groundwater to beneficial use for the purposes associated with the permit, that volume of water becomes perfected and the Director shall issue a certificate for that volume or increase the groundwater right on the applicant's existing certificate. For the PURPOSES of this subsection, a Permit holder may apply to perfect all or part of the permit volume. Permits that are UNPERFECTED cannot be transferred and permits cannot earn flexibility credits.

K. For the purposes of this article, any data or estimate a person submits regarding a person's groundwater use is a public record under title 39, chapter 1 and may be presented as evidence in any court in this state only if the case does not involve a general stream adjudication or a federally RESERVED water right or the groundwater user consents to the waiver of this privilege. If a groundwater user voluntarily submits evidence of water conservation, the department shall issue the water user a receipt of water conservation acknowledging the amount of water conserved. The department shall provide the basin management council with a copy of all past and future receipts granted in the groundwater basin pursuant to this section. END_STATUTE

START_STATUTE45-445.03. Basin management areas; withdrawals of groundwater right; flexibility account; conveyances; rules; extinguishment

A. A person who is entitled to use groundwater pursuant to a certificate of groundwater right may:

1. Use groundwater in excess of the amount allowed by the right in an amount determined pursuant to subsection E of this section.

2. Use less than the amount allowed by the right in one accounting period and use the remaining amount allowed by the right in a succeeding accounting period or periods.

B. The director shall establish rules for the maintenance of a flexibility account for each certificate of groundwater right in a basin management area.

C. If a person who is entitled to use groundwater pursuant to a certificate of groundwater right uses solely groundwater during any accounting period, the director shall:

1. Register a debit to the account if the amount of groundwater used during the accounting period is greater than the amount of the annual allocation of water granted pursuant to a certificate of groundwater right or the amount of water that the person is entitled to use under an active basin management area management plan pursuant to Section 45-446.01.

2. Register a credit to the account if the amount of groundwater used during the accounting period is less than the amount of the annual allocation of water granted pursuant to a certificate of groundwater right or the amount of water that the person is entitled to use under an active basin management area management plan pursuant to Section 45-446.01.

D. If a person who is entitled to use groundwater pursuant to a certificate of groundwater right uses a combination of surface water, effluent or groundwater or any combination thereof and uses of water by the person from all sources, except for surface water, other than Colorado river water, released for beneficial use from storage, diversion or distribution facilities to avoid spilling that would otherwise occur due to uncontrolled surface water inflows that exceed facility capacity, in the accounting period:

1. Exceed the amount of the annual allocation of water granted pursuant to the certificate of groundwater right or the amount of water that the person is entitled to use under an active basin management area management plan pursuant to Section 45-446.01, the amount of groundwater used up to the amount of the excess, less any effluent used, shall be registered as a debit to the account.

2. Are less than the amount of the annual allocation of water granted pursuant to the certificate of groundwater right or the amount of water that the person is entitled to use under an active basin management area management plan pursuant to Section 45-446.01, the amount of water not used that would have been groundwater shall be registered as a credit to the account.

E. The maximum excess amount of groundwater that a pERSON may use pursuant to this section in any one year shall be equal to twenty-five percent of the annual allocation of water granted pursuant to a certificate of groundwater right. An owner of a certificate of groundwater right and the person using groundwater pursuant to the right are deemed to violate this section if the flexibility account for the right is in arrears at any time in excess of this amount. Groundwater equal to the credit balance in the flexibility account may be used at any time.

F. If a certificate of groundwater right is conveyed in whole or in part, each acre-foot conveyed shall carry with it a proportional share of any debits or credits in the flexibility account for the right.

G. Each person who owns a certificate of groundwater right and whose right has registered a credit balance to its flexibility account may convey or sell all or a portion of the credit balance to any person, including the conveyor or seller of the credit balance, who owns another certificate of groundwater right in the same groundwater basin. A person who sells or conveys all or a portion of a credit balance pursuant to this subsection, and the person to whom the credit balance is sold or conveyed, shall notify the director of the sale or conveyance within thirty days after the sale or conveyance on a form prescribed and furnished by the director.

H. A sale or conveyance of all or part of a credit balance under subsection G of this section is effective only if the director receives the notice required by subsection G of this section within thirty days after the sale or conveyance. After receiving the notice, the director shall register a deduction of the credit amount conveyed or sold from the conveyor's or seller's flexibility account balance and the corresponding addition to the conveyee's or purchaser's flexibility account balance. The deduction and addition to the flexibility account balances are effective as of the date of the sale or conveyance.

I. Each person who owns a certificate of groundwater right and whose right has registered a credit balance to its flexibility account may extinguish all or a portion of the credit balance. The person who extinguishes all or a portion of a credit balance pursuant to this subsection shall notify the director of the extinguishment on a form prescribed and furnished by the director.

J. The extinguishment of all or part of a credit balance under subsection I of this section is effective as of the date the director receives the notice required by subsection I of this section. After receiving the notice, the director shall register a deduction of the credit amount extinguished from the flexibility account balance of the person who extinguished the credit balance. END_STATUTE

START_STATUTE45-445.04. Use of municipal and industrial groundwater rights

The owner of a municipal and industrial certificate of groundwater rights may:

1. use groundwater withdrawn pursuant to the CERTIFICATE of groundwater rights for any nonagricultural use at any location in the basin management area subject to the provisions governing transportation of groundwater prescribed in article 8 of this chapter.

2. withdraw groundwater pursuant to the CERTIFICATE of groundwater rights only from those wells outlined on the user's certificate of groundwater rights.

3. request the director to issue a revised certificate of groundwater rights to reflect new or additional points of withdrawal or new or additional types of nonagricultural use.

4. Lease All or part of the municipal and industrial groundwater right. If a groundwater right is leased, the lessee may use groundwater withdrawn pursuant to the groundwater right as prescribed by this section. END_STATUTE

START_STATUTE45-445.05. Use of agricultural groundwater rights

A. The owner of an agricultural certificate of groundwater rights pursuant to section 45-445.02 may:

1. use groundwater withdrawn pursuant to the CERTIFICATE of groundwater rights for any agricultural use on any land described in the certificate of groundwater rights.

2. request the director to issue a revised certificate of groundwater rights to reflect new or additional acres of land within the basin management area on which the owner wishes to use groundwater withdrawn pursuant to the CERTIFICATE of groundwater rights for agricultural purposes.

b. The right to use groundwater pursuant to this section is appurtenant to the acres of land described in the agricultural certificate of groundwater rights. An agricultural groundwater right is owned by the owner of the land to which the groundwater right is appurtenant and may be leased for agricultural use with the land to which it is appurtenant.

C. The owner or lessee of an agricultural certificate of groundwater rights may withdraw or receive groundwater from any location in the basin management area subject to the provisions governing transportation of groundwater prescribed in article 8 of this chapter. END_STATUTE

START_STATUTE45-445.06. Right to convert agricultural groundwater rights for municipal and industrial use

A. The owner of an agricultural certificate of groundwater rights may convert all or part of the groundwater right to a municipal and industrial use.

B. a MUNICIPAL or INDUSTRIAL groundwater user may withdraw and use a converted AGRICULTURAL groundwater right annually for municipal and industrial use as follows:

1. If the municipal and industrial use is on land described in the agricultural certificate of groundwater rights, eighty-five percent of the amount of the agricultural groundwater right allocation.

2. If the municipal and industrial use is on land other than land described in the agricultural certificate of groundwater rights, eighty-five percent of the amount of the agricultural groundwater right allocation.

C. A person who proposes to convert an agricultural groundwater right to a municipal and industrial use shall notify the director, on a form prescribed and FURNISHED by the director, of the conversion and the location of each well from which groundwater will be withdrawn for a municipal and industrial use and the types of use for which groundwater will be withdrawn.

D. After receiving notice of a conversion of an agricultural groundwater right to a municipal and industrial use, the director shall issue to the owner a revised agricultural certificate of groundwater rights for the remaining agricultural use, if any, and a new municipal and industrial certificate of groundwater rights for the converted municipal and industrial use. END_STATUTE

START_STATUTE45-445.07. Conveyance of certificate of groundwater rights

A. The owner of a municipal and industrial certificate of groundwater rights may sell or convey all or part of the groundwater right for any nonagricultural use in the same groundwater basin.

B. wITHIN THIRTY days AFTER A CONVEYANCE OF A GROUNDWATER RIGHT, The conveyor of all or part of a municipal and industrial right AND the conveyee of the municipal and industrial right shall notify the director of the conveyance on a form prescribed and furnished by the director. fOR THE PURPOSES OF THIS SUBSECTION, A notice provided by the conveyor and the conveyee shall include the following:

1. The amount in acre-feet retained by the conveyor, if any.

2. the amount in acre-feet transferred to the conveyee.

3. The types of use for which groundwater will be withdrawn by the conveyor, IF ANY.

4. The types of use for which groundwater will be withdrawn by the conveyee.

5. The location of each well from which groundwater will be withdrawn by the conveyor, if any.

6. THE LOCATION OF EACH WELL FROM WHICH GROUNDWATER WILL BE WITHDRAWN by the conveyee.

7. Other information as the director may reasonably require.

C. After receiving notice of a conveyance of a municipal and industrial groundwater right, the director shall issue to the conveyor a revised municipal and industrial certificate of groundwater rights for the portion of the groundwater right retained by the conveyor, if any, and issue to the conveyee a new municipal and industrial certificate of groundwater rights for the portion of the groundwater right conveyed.

D. If the owner of an agricultural certificate of groundwater rights conveys land described in THE GROUNDWATER USER'S certificate, each acre conveyed shall carry with it a proportional share of the annual allocation of groundwater granted pursuant to A certificate.

E. within thirty days after the conveyance OF land described in an agricultural certificate of groundwater rights, THE CONVEYOR and the conveyee shall EACH notify the director of the conveyance on a form prescribed and furnished by the director. fOR THE PURPOSES OF THIS SUBSECTION, A notice provided by the conveyor and the conveyee shall include ALL OF the following:

1. a legal description and a map of the land retained by the seller, if any.

2. a legal description and a map of the land conveyed to the conveyee.

3. Other information as the director may reasonably require.

F. After receiving notice of a sale or conveyance of an agricultural certificate of groundwater right, the director shall issue to the conveyor a revised certificate for the portion of the groundwater right retained by the conveyor, if any, and issue to the conveyee a new agricultural certificate of groundwater rights for the portion of the groundwater right conveyed.

G. The owner of an agricultural certificate of groundwater rights may sell or convey all or part of the right for agricultural use on other land in the same groundwater basin.

H. Within thirty days after a conveyance as prescribed in subsection G of this section, The conveyor of an agricultural certificate of groundwater rights and the conveyee shall notify the director of the conveyance on a form prescribed and furnished by the director. The notice provided by the conveyor and the conveyee shall include the following:

1. The amount in acre-feet retained by the conveyor, if any.

2. the amount in acre-feet transferred to the conveyee.

3. A legal description and a map of the land on which the conveyor desires to use groundwater for an agricultural purpose and the portion of the agricultural groundwater right retained.

4. a legal description and a map of the land on which the conveyee desires to use groundwater for AGRICULTURAL use PURSUANT to the agricultural groundwater right conveyed.

5. Other information as the director may reasonably require.

I. After receiving notice of a sale or conveyance of an agricultural certificate of groundwater rights for use on other AGRICULTURAL land, the director shall issue to the conveyor a revised certificate of groundwater rights for the portion of the right retained by the conveyor, if any, and issue to the conveyee a new agricultural certificate of groundwater rights for the portion of the right conveyed.

j. Notwithstanding any other law, the transfer of FLEXIBILITY credits between an irrigation user and a livestock industrial user that share common ownership shall not be subject to any reduction in the irrigation GROUNDWATER right allocation. END_STATUTE

START_STATUTE45-445.08. Retirement; certificate of groundwater rights

A. The owner of a certificate of groundwater rights may retire all or part of the groundwater rights.

B. A person who proposes to retire all or part of a certificate of groundwater rights shall notify the director of the retirement on a form prescribed and furnished by the director. The notice provided by the person proposing to retire all or part of a certificate of groundwater rights shall include the following:

1. The amount in acre-feet of the groundwater right to be retired.

2. If the groundwater right to be retired is a municipal and industrial groundwater right:

(a) the type or types of use for which groundwater will be withdrawn under the portion of the groundwater right not retired, if any.

(b) The location of each well from which groundwater will be withdrawn under the portion of the groundwater right not retired, if any.

3. If the groundwater right to be retired is an agricultural groundwater right:

(a) a legal description and a map of the land on which the person proposing to retire the groundwater right desires to use for agricultural use the portion of the groundwater right not retired, if any.

(b) Other information as the director may require.

C. After receiving notice of retirement of all or part of a certificate of groundwater rights, the director shall issue to the person who retires the groundwater right a revised certificate of groundwater rights for the portion of the groundwater right not retired, if any. END_STATUTE

START_STATUTE45-445.09. Basin management; active management area; prohibition

The director or the voters of a basin management area may not designate a basin management area as an active management area or irrigation non-expansion area. END_STATUTE

START_STATUTE45-445.10. Irrigation non-expansion area to basin management area

If a basin management area is ESTABLISHED PURSUANT to this article in an area that was previously designated as an irrigation non-expansion area, the director shall declare all basins in the irrigation non-expansion area as a basin management area and the irrigation non-EXPANSION area and any regulations adopted PURSUANT to the DESIGNATION as an irrigation non-expansion area TERMINATE. END_STATUTE

START_STATUTE45-445.11. Preemption; groundwater transportation

THIS ARTICLE does not PREEMPT THE TRANSPORTATION OF GROUNDWATER PURSUANT TO ARTICLES 8 AND 8.1 OF THIS CHAPTER. END_STATUTE

START_STATUTE45-445.12. Basin management council; members; term; duties; exemption

A. A basin management council shall be established in each basin management area consisting of the following five members:

1. One member who represents or is An industrial user with a CERTIFICATE of GROUNDWATER rights in the basin and is a resident of this state.

2. Two members who represent or are An irrigation user with a CERTIFICATE of GROUNDWATER rights in the basin and is a resident of this state.

3. One member who represents A MUNICIPAL user with a CERTIFICATE of GROUNDWATER rights in the basin and is a resident of this state.

4. One at-large member who resides in the basin.

b. Members of the Basin Management Council shall be appointed by the following ENTITIES and in the following order:

1. one member who is appointed by the governor.

2. one MEMBER who is APPOINTED by the speaker of the house of REPRESENTATIVES.

3. One member who is appointed by the PRESIDENT of the Senate.

4. One member who is appointed by the governor from a list of three names the MINORITY leader of the house of REPRESENTATIVES provides to the governor.

5. One member who is appointed by the governor from a list of three names the MINORITY leader of the Senate provides to the governor.

C. If a council member position is vacated, the appointing authority shall immediately appoint a new member who represents the same class of CERTIFICATED groundwater right holder or resident of this state at large as the prior APPOINTEE. Council members may be removed only for CAUse. If a council member is removed the replacement member's term shall end at the same time as the replaced member's term.

D. Except as provided in subsection F of this section, basin management council members are subject to a retention election every four years and may continue to serve only if retained by a majority vote of eligible voters.

E. Basin management council members are not eligible to receive compensation but are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2.

F. the initial basin management council members shall assign themselves by lot to class one and class two. Class one shall have three members and Class two shall have two members. If a basin MANAGEMENT council is ESTABLISHED sixty days or more before a regular general election, class one shall be subject to RETENTION at the next regular general ELECTION after ESTABLISHMENT and class two shall be subject to retention on the regular general election IMMEDIATELY following the next regular general election ballot after ESTABLISHMENT. If a basin management council is ESTABLISHED less than sixty days before a regular general election, class one shall be subject to RETENTION at the second next regular general election after ESTABLISHMENT and class two shall be subject to retention at the third regular general election after ESTABLISHMENT.

G. At least sixty but not more than ninety days before the REGULAR general election in which a basin management council member is subject to RETENTION, a council member who desires to be RETAINED shall file, in the office of the clerk or clerks of the board of supervisors in which the basin management area is located, a DECLARATION of the council member's desire to be RETAINED. if a council member who is subject to retention does not file a DECLARATION of the council member's desire to be retained in office, the council member's office becomes vacant on january 1 following the general election in which the COUNCIL member would have been a candidate for RETENTION.

H. the name of any basin management council member whose DECLARATION to be retained is filed as provided in this section shall be placed on the appropriate OFFICIAL ballot at the NEXT regular general election under a nonpartisan designation and in SUBSTANTIALLY the following form: Shall (name of council member) of the (NAME of basin) Basin management council be RETAINED in office? Yes __ No __ (mark X after one).

I. If a MAJORITY of those voting on the question vote "no", a vacancy shall exist, which shall be filled as provided in this section. a council member who RECEIVES a MAJORITY of "no" votes is not RETAINED and is not ELIGIBLE for appointment on any basin management council. If a MAJORITY of those voting on the question vote "yes", the council member is retained in office for another FOUR-YEAR term, subject to removal for CAUSE only by the governor or by recall as provided in title 19, chapter 2.

J. Council members removed for CAUSE or recalled from office are not ELIGIBLE for appointment on any basin management COUNCIL. Council members who are not recalled or removed for CAUSE or who do not receive a majority of "no" votes in a RETENTION election are ELIGIBLE to serve as many terms as desired until recalled, removed for cause or RECEIVING a majority of "no" votes in a retention ELECTION.

K. The basin management council shall:

1. Select a chairperson from the council's membership.

2. Meet as often as the chairperson deems necessary.

3. Hold at least two public meetings in the basin and allow public comment before adopting a basin management area management plan.

4. Submit a proposed management plan to the chairpersons of the house of representatives and senate natural resources, energy and water committees, or their successor committees, before adopting a management plan.

5. On request of the chairperson of the house of representatives or senate natural resources and energy committee, or its successor committee, attend a joint legislative hearing to evaluate a proposed management plan.

6. In conjunction with the department, apply for and distribute grants for water conservation, water augmentation or water system upgrades within the active basin management area. Monies awarded pursuant to this paragraph shall be distributed equitably across all sectors.

7. Submit a plan for water management to the director. The plan shall be consistent with the management goals of a basin management area, shall be legally and economically feasible and must be approved by a majority of the members of the council. The plan may not require more than a two percent annual reduction in a water user's original allotment granted pursuant to a certificated groundwater right or prohibit a groundwater user from withdrawing intentionally created groundwater recharge, including effluent with a ten percent net benefit to the aquifer. The plan shall require any annual reduction in water use to be equal in percentage for all users with a certificated groundwater right. The plan shall require a water user to reduce annual water use by ten percent of the annual allocation of water that the user is ENTITLED to PURSUANT to a CERTIFICATE of GROUNDWATER rights within ten years after the formation of the basin management area and may not REQUIRE any water user to ACHIEVE total water use reductions in INCREMENTS greater than two percent per year.

8. Provide education to water users and the public on efficient water management and conservation.

L. the Council May:

1. After receiving the report of hydrological CONDITIONS in the basin provided by the department in the year fourteen after formation of the basin management area and by an affirmative vote of four or more council members:

(a) Increase the MANDATORY reduction in the annual allocation OF WATER PURSUANT TO A CERTIFICATE OF GROUNDWATER RIGHTS beginning in year fifteen after formation of the basin management area by not greater than one percent a year and in a total AGGREGATE amount that is EQUAL or less than the director's RECOMMENDATION IF ALL OF THE FOLLOWING APPLY:

(i) the HYDROLOGICAL study DEMONSTRATES that the conditions in subsection M, paragraph 2, subdivision (c) of this section exist in the basin.

(ii) the COUNCIL holds at least one public meeting on the hydrological report and the director's recommendation before voting on any REDUCTION in the annual allocation.

(iii) The director RECOMMENDS that the COUNCIL increase the MANDATORY reduction in the annual allocation of water pursuant to a certificate of groundwater rights between one and five percent.

(b) Decrease the MANDATORY reduction in the annual allocation OF WATER PURSUANT TO A CERTIFICATE OF GROUNDWATER RIGHTS beginning in year fifteen after formation of the basin management area by not greater than one percent a year IF the HYDROLOGICAL study DEMONSTRATES that the conditions in subsection M, paragraph 2, subdivision (c) of this section exist in the basin.

2. adopt A best management practices program for MUNICIPAL users that allows a MUNICIPAL user who is entitled to use groundwater pursuant to a certificate to implement the MUNICIPALITy's choice of conservation programs approved by the department and appropriate to the MUNICIPALITy's water use. Municipal users that participate in the best management practices program shall be exempt from any mandatory reduction in annual allocation granted pursuant to a certificate of groundwater rights.

M. The director shall:

1. Starting five years after formation of a basin management area, conduct an economic study to be released to the public that examines the following:

(a) the COSTS of PERMANENTLY closing the basin management area, including the reduction in local property, sales and transaction PRIVILEGE and income taxes.

(b) the COSTS of the MANDATORY ten percent reduction in annual groundwater use pursuant to CERTIFICATED groundwater rights, including the reduction in local property, sales and transaction PRIVILEGE and income taxes.

(c) the tangible economic BENEFITS of PERManently closing the basin management area and the MANDATORY ten percent REDUCTION in annual groundwater use pursuant to CERTIFICATED groundwater RIGHTS. For the purposes of this subdivision, ECOSYSTEM benefits do not CONSTITUTE TANGIBLE economic BENEFITS.

2. not EARLIER than ten years after formation of a basin management area, INITIATE a hydrological analysis of the groundwater basin that is RELEASED to the public and the basin management COUNCIL not more than fourteen years after formation of the basin management area. The analysis shall include all of the following:

(a) a summary of hydrological IMPROVEMENTS in the basin caused by the basin closure and regulation.

(b) a report of transfers involving all or portions of certificates of groundwater rights and the volume of water in acre-feet that was saved as a result.

(i) Land SUBSIDENCE WITHIN the basin due to GROUNDWATER WITHDRAWAL is endangering PROPERTY or potential STORAGE capacity.

(ii) There has been ACCELERATED decline in groundwater levels within the GROUNDWATER basin over the preceding five years as measured by AT LEAST ten index wells across the basin.

(iii) The DEPARTMENT has reported OBSERVED mean declines in GROUNDWATER levels in the basin greater than fifty feet during the preceeding ten-year.

(d) an assessment whether the basin management council could restore all or a portion of users' maximum annual allocation of water pursuant to CERTIFICATED groundwater RIGHTs WITHOUT substantially adversely affecting the hydrological conditions in the basin.

(e) a recommendation as to whether the basin management council should restore all or a portion of the basin's groundwater users' CERTIFICATED water RIGHTs WITHOUT substantially affecting the basin.

3. Provide TECHNICAL and legal support to the COUNCIL on request of any council member.

4. not require any user in a basin management area to measure or report water use with the use of devices or methods not prescribed in this article.

5. not require any groundwater user in a basin management area to measure withdrawals from any wells in the basin management area except as prescribed in this article.

6. ADOPT A WELL-SPACING REQUIREMENT FOR NONEXEMPT WELLS that are DRILLED AFTER THE BASIN is closed.

7. allow a person to deepen or construct a REPLACEMENT well at APPROXIMATELY the same location without conducting a well impact analysis.

N. TWENTY-Four years after the formation of a basin management area and every fifteen years thereafter, The basin management council shall set a SCHEDULE for the proceeding TEN-YEAR period of mandatory reductions in annual allocations of groundwater PURSUANT to CERTIFICATES of groundwater rights in an amount between zero and fifteen percent, which shall take effect at the beginning of the next year. For the purposes of this section, mandatory reductions in annual allocations shall not increase or decrease by more than one percent a year.

o. Beginning TWENTY-five years after the formation of a basin management area and every ten years thereafter, the director shall release a HYDROLOGICAL report as prescribed by this section based on the prior TEN-YEAR period.

P. at the end of every ten-year period of MANDATORY REDUCTIONS PRESCRIBED in subsection N of this section and before the beginning of the proceeding ten-year period prescribed in subsection N of this section, all mandatory reductions in annual allocation as prescribed by the basin management COUNCIL shall remain in effect.

Q. Notwithstanding any other law, a basin management COUNCIL may not reduce the annual allocation of groundwater AWARDED to an irrigation user PURSUANT to a CERTIFICATE of GROUNDWATER rights if the irrigation user farms less than one hundred TWENTY acres and uses less than two and one-half acre-feet per acre per year.

R. A basin management council may have only those powers given to it by statute and may EXERCISE the powers of the COUNCIL, including the SUBMISSION and ADOPTION of a basin MANAGEMENT area management plan, only on a majority vote of the COUNCIL or a four person majority as prescribed by this section. Unless otherwise authorized by law, the director may not take any action in a basin management area not recommended by the council. END_STATUTE

START_STATUTE45-445.13. Basin management areas; goals

The goals of a basin management area and a basin management council may be any of the following as determined by the council:

1. To protect the economy while considering the need to preserve groundwater for future non-irrigation uses.

2. To gather and obtain a better understanding of the groundwater basin and aquifer health by installing index wells and promoting water users in the groundwater basin to voluntarily provide groundwater data to the council.

3. To preserve existing groundwater uses in the groundwater basin while allowing the development of other uses and preserving future water supplies for other uses.

4. To reduce the rate of aquifer depletion, from the current depletion rate at the time a basin management area is established to a set rate by a set year as determined by the council.

5. To address the annual average depth-to-static level across the groundwater basin from dropping below a set level.

6. To maintain groundwater programs in the groundwater basin that provide reasonable access to a supply of water to meet reasonable commercial and basic domestic needs.

7. To increase the total amount of natural, incidental or artificial recharge in the groundwater basin each year, from a set level in acre-feet per year to a higher set level in acre-feet per year, by a set year as determined by the council.

8. to increase the total AMOUNT of water REUSE in the GROUNDWATER BASIN each year, from a set level in acre-feet per year to a HIGHER set level in acre-feet per year, by a set year as DETERMINED by the COUNCIL. END_STATUTE

Sec. 2. Section 49-1270, Arizona Revised Statutes, is amended to read:

START_STATUTE49-1270. Definitions

In this article, unless the context otherwise requires:

1. "Eligible entity" means any of the following:

(a) A water provider that distributes or sells water outside of the boundaries of an initial active management area in which part of the central Arizona project aqueduct is located.

(b) Any city, town, county, district, commission, authority or other public entity that is organized and that exists under the statutory law of this state or under a voter-approved charter or initiative of this state that is located outside of the boundaries of an initial active management area in which part of the central Arizona project aqueduct is located.

2. "Loan" means leases, loans or other evidence of indebtedness for water supply development purposes issued from the water supply development revolving fund.

3. "Loan repayment agreement" means an agreement to repay a loan issued from the water supply development revolving fund entered into by an eligible entity.

4. "Water supply development revolving fund" or "fund" means the water supply development revolving fund established by section 49-1271. END_STATUTE Sec. 3. Emergency

This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.